Beginning work on alternative revenue sources
for municipalities and counties

  Property tax relief
  Tip fee proposal
  Smoking regulations
  More anti-annexation bills

We have begun talking with legislators about securing alternative revenue sources for municipalities and counties. Cities and towns need to make water and sewer, stormwater and transportation improvements, while counties must build and maintain public schools and other infrastructure.  In addition, counties are seeking relief from the local share of Medicaid costs. The needs are critical, and we are now seeking revenue sources to provide the necessary resources.

Alternative revenue sources most likely would be some form of local option revenue, perhaps a menu of local options.  We have partnered with the N.C. Association of County Commissioners on this issue. We agree that any revenue authorization in this session must include a significant and equitable municipal share, perhaps earmarked for local capital purposes.

There are a number of bills already for local option sales tax increases for particular counties, with proceeds for either school construction or general public purposes. Many bills have been introduced to give additional local governments authority to levy an occupancy tax.  Legislation authorizing a menu of local option taxes has also been introduced. All of this activity should provide an opportunity for additional discussion on the revenue needs of local government in this state.

We expect considerable opposition from some groups to any alternative revenue sources proposed for local governments. We ask that you talk with your legislators about your specific infrastructure needs, what you are already doing in this area, and what you cannot fund solely at the local level.

Please let us know your thoughts on alternative revenue sources, especially if one would be particularly useful in your municipality. We are committed to achieving this goal, and we need your active support and participation.

The League is sending each member municipality a packet of information to assist you in talking with your legislators regarding infrastructure needs and financing.

Property tax relief
Many legislators are talking about the need to provide additional property tax relief for low-income citizens and those who live in areas that have experienced tremendous increases in property values. The League has been involved in a series of meetings with legislators on property tax issues.

Sen. Jim Jacumin has introduced SB 445 - Study Bill for Property Tax Relief, which directs the Property Tax Subcommittee of the Revenue Laws Committee to study the issue. There would be an interim report to the 2008 session, final report to the 2009 session.  SB 412 - Homestead Exclusion Modifications would reduce property taxes for N.C. homeowners with incomes under $50,000. The tax would be reduced by a percentage based on owner's income, with the decrease ranging from 3.5 percent to 5 percent. The bill also allows an elderly or disabled homeowner who meets certain qualifications to defer property taxes until the owner dies, the property is transferred, or the owner does not occupy the residence for three successive years. Sen. Harry Brown introduced the bill.

Tip fee proposal
Municipalities will be receiving (or may have already received) a letter from the N.C. Department of Environment and Natural Resources concerning a proposed $2.00 per ton state surcharge on the tipping fee for disposing of solid waste in any landfill in the state and on transferring waste to a transfer station for disposal outside the state. The Governor's budget proposal includes the surcharge, which is estimated to raise $22 million per year, and indicates that the funds would help with assessment and remediation of old unlined landfills and inactive hazardous waste sites throughout the state. There are no details on how the money would be used in that effort, other than a request for twelve new positions to implement cleanup at the old landfills. Thus far this is simply a request in the Governor's budget proposal and no bill has been introduced. The League's core principles provide that state taxes or fees should not be imposed on municipal enterprise services, and for that reason we have opposed a statewide tipping fee surcharge. Let us hear from you with your feedback on the proposal and DENR's letter.

Smoking regulations
Legislation to remove state preemption of local government authority to regulate smoking in government buildings moved forward this week. HB 24 - Smoking in State Govt. Buildings/ Prohibition was given a favorable report by the House Health Committee. In addition to banning smoking in buildings owned or leased by the state government, the bill repeals G.S. Chapter 143, Article 64, thereby restoring city and county authority to set no-smoking policies in their own facilities. Currently, the state and local governments must set aside smoking areas in their buildings. 

More anti-annexation bills
Reps. Bill Faison, Larry Brown and Joe Boylan have introduced HB 378 - Annexation ETJ Residents Vote to provide that a city-initiated annexation ordinance does not become effective unless the city's governing board has provided an opportunity for the residents of the annexation area to vote for each officer of the governing board. It further prohibits cities from exercising extraterritorial jurisdiction unless the ETJ residents have been given the opportunity to vote for municipal officers. Reps. Faison, Brown and Boylan also sponsored HB 379 - Involuntary Annexation Changes , which requires that in a city-initiated annexation, the annexation area must be contiguous to an area within the municipality's boundaries that is of equal size or greater and that has been developed for urban purposes.

Rep. Brown also introduced HB 457 - No Annexations Outside ETJ, amending the statutes on voluntary satellite annexations to require that all of a proposed satellite annexation area must be located within the municipality's ETJ. SB 479 - Mandatory Water/Sewer Connection , introduced by Sen. Andrew Brock, would allow property owners in city-initiated annexations to pay mandatory water and sewer connection charges over a 25-year period.

The League stands opposed to all of these bills.

Following are some of the bills that were introduced or acted upon this week. If you need a copy of these or any other bills, please contact the Legislative Printed Bills Office at 919-733-5648 or the League office. Remember that bills and legislative calendars are now available on the Internet at http://www.ncleg.net . Please contact the League staff if you have any particular interest or concern regarding any piece of legislation.

ENVIRONMENT
Bill: SB 396 - RESTRICTION ON EMC RULEMAKING AUTHORITY
Sponsors: Hoyle (D43)

Status: 02/28/2007 - Senate Committee On Commerce, Small Business and Entrepreneurship

Prohibits the Environmental Management Commission from adopting rules that condition the granting of any permit, approval, or certification on the fulfillment of a requirement that is beyond the authority of the applicant and that is within the authority of someone other than the applicant.

GENERAL GOVERNMENT
Bill: SB 362 - ATV EXEMPTIONS ON BEACHES/COASTAL AREAS

Sponsors: Preston (R2)

Status: 02/27/2007 - Senate Committee On Agriculture/Environment/Natural Resources

Amends G.S. 20-171.22 to exempt the owner or operator of an all-terrain vehicle if he or she is otherwise lawfully using the ATV on any beach or coastal area where such vehicles are allowed by law.

LOCAL BILLS
Bill:  HB 393 - CHARLOTTE/WATER & SEWER FACILITIES

Sponsors: Saunders (D99); Samuelson (R104)

Status: 02/28/2007 - House Committee On Local Government

Authorizes the city to use the design-build and design-build-operate methods of construction to build water and sewer facilities.

Bill: HB 407 - EXTEND MAGNOLIA ETJ

Sponsors: Tucker (D4)

Related: 2007:SB439

Status: 03/01/2007 - House Committee On Local Government

Extends the town's extraterritorial jurisdiction to include a described area.

Bill: HB 427 - NAVASSA ZONING JURISDICTION

Sponsors: Hill (D20); Stiller (R17)

Status: 03/01/2007 - House Committee On Local Government

Divests planning jurisdiction over certain property from the town and vest it in the county.

Bill: HB 428 - NAVASSA DEANNEXATION

Sponsors: Hill (D20); Stiller (R17)

Status: 03/01/2007 - House Committee On Local Government

Summary: Repeals an annexation of the town.

Bill:  SB 349 - CARY CLOSING-OUT SALES

Sponsors: Cowell (D16)

Status: 02/27/2007 - Filed in the Senate

Summary: Permits the town to designate someone other than the city clerk to issue closing-out sale licenses.

Bill: SB 350 - APEX/GARNER ELECTRONIC NOTICES

Sponsors: Stevens (R17)

Status: 02/27/2007 - Filed in the Senate

Authorizes the governing body to adopt ordinances providing that notice of public hearings may be given through electronic means, including, but not limited to, the town's Internet site. Such ordinances do not supersede any state law that requires notice by mail to certain classes of people or the posting of signs on certain property and does not alter the publication schedule for any public notice.

Bill: SB 354 - WILMINGTON EMINENT DOMAIN

Sponsors: Boseman (D9)

Status: 02/27/2007 - Filed in the Senate

Authorizes the city to use the procedure and authority of G.S. Chapter 136 in condemnation proceedings concerning water and sewer.

Bill: SB 377 - LEWISVILLE ADVISORY REFERENDUM

Sponsors: Brunstetter (R31)

Status: 02/28/2007 - Filed in the Senate

Authorizes the town to conduct an advisory referendum on aquiring land for parks and recreation.

Bill: SB 418 - CHAPEL HILL CAMPAIGN FINANCE OPTIONS

Sponsors: Kinnaird (D23)

Status: 03/01/2007 - Filed in the Senate

Define a uniform program of public campaign financing and authorizes the town to conduct such a program.

Bill: SB 427 - AYDEN UNFIT DWELLINGS

Sponsors: Jenkins (D3)

Status: 03/01/2007 - Filed in the Senate

Authorizes the town to order dwellings determined unfit for human habitation repaired or demolished after a period of six months.

Bill: SB 432 - GREENSBORO DEANNEXATION

Sponsors: Hagan (D27)

Status: 03/01/2007 - Senate Committee On Finance

Removes described properties from the city.